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Big Business has shot itself in the foot

Mon., Nov. 25, 2013

Re: Why have governments turned on Big Business? Nov. 16

Why have governments turned on Big Business? Nov. 16

Columnist David Olive misses the mark more than twice in this piece.

First of all, to characterize U.S. Republicans as “anti-business” is preposterous. The Republicans being led around by the nose of the Tea Party would, if they could, eliminate the minimum wage and deregulate the workplace for employee safety and environmental protections. They make no secret of that objective.

Second, ever since NAFTA it has been the same old song from corporate interests. They want more — more of anything that gives them the edge; more profit or more influence and leverage.

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The most glaring example is Bombardier and their modus operandi of extorting money from the Canadian government. In my lifetime I’ve seen them do this trick at least three times. Bombardier says they have a big contract to fulfil and are deciding in which country is the most advantageous to do the manufacturing. It then gives the PMO a nudge and asks for some “incentive” to keep the work in Canada. Ottawa obliges Bombardier with tens of millions of incentive. Bombardier takes the money and takes the manufacturing offshore anyway.

When Big Business wanted more of anything they got it and they’ve been getting it for 40 years. In that period the productivity of the labour force has increased steadily while the wages of that workforce has flat-lined. Big Business cracked the whip, we made the trip and they kept all the profits and gains. That is not capitalism. It’s an abusive relationship.

Ultimately, Big Business has shot itself in the foot. The 2008 crisis was caused by this very phenomena of hoarding the cash. It’s predictable. It’s repeatable. It is a repeat of the 1929 crash. What preceded the crash was a tipping point where the vast majority of consumers have so little income that they have no disposable income.

When that happens sales evaporate and Big Business starts laying off employees, which creates a negative feedback loop. Then government, at the behest of Big Business, starts budget cutting and deficit slashing, which in turn pulls more money out of the economy. Another negative feedback loop. What’s the opposite of the multiplier effect?

Consider the thesis of David Olive in this context. Big Business, aka the 1 per cent, with all the cash, are crying the blues because governments are unwilling to help them extract the last few coins out of the 99 per cent who have nothing left to give. The 99 per cent just want a descent living wage and to have an equitable share in the wealth that they themselves help create. The statistics are clear that for the last four decades the middle class on down, (the 99 per cent) have lost ground. We are poorer now, by a long shot, than we were 40 years ago. Governments respond by crushing their unions and pushing for right to work legislation.

Big Business is a force unto itself. The trade agreements and the impending Trans Pacific Partnership have conferred upon Big Business the sovereignty of nation states. Big Business doesn’t need an advocate and they don’t need more of anything. People need an advocate and they need protection from the interests of Big Business and that has been sorely lacking for decades.

Protections in every sense. Safety in the workplace and in the communities of the workplace. Protections from the environmental impacts of business. Protections of the health of consumers of the products of big business. Protections from price gouging and profiteering and monopolies.

For example, $40 a month for Internet access? Come on! Give me a break. It went from $19.99 for 56k dial-up to $30 to $60 for hi-speed cable or DSL access. Economies of scale anyone? Those rates are inflated by 100 per cent minimum. The ISPs can command that price for one reason and it isn’t because that is what the access is worth. It’s because what you are getting access to is worth. The ISPs are treating the entirety of the content of the Internet as their very own ‘value added’. Imagine two cars at the gas pumps; a Hyundai and a Cadillac. The Hyundai gets a fill-up for $1.30 per litre but the Cadillac has to pay $2 per litre. Why? Because the fuel in the Cadillac gives the user access to much more luxurious experience and it matters not that the oil company had nothing to do with the manufacture of either cars. That is the ISP business model in a nutshell.

The American Republicans are pro-business all the way. In pursuit of that aim they made over 40 attempts to repeal The Affordable Care Act, aka Obamacare. When those attempts failed they shutdown the government in an attempt to defund Obamacare. Those are the facts. That was a pro-business agenda.

The fact that the shutdown was extremely harmful to many business interests in the U.S. and around the world is not evidence of a Republican anti-business stance. It is evidence of one thing that is really so obvious it needs not much supporting evidence at all. The U.S. Republicans and Tea Party politicians are, simply put, as dumb as a bag of hammers. They are uneducated hicks who don’t understand complexity of any kind. One or two degrees of complexity they can barely deal with but any further than that and it’s no longer their business; it’s God’s business. That’s the Republican answer to any nuance in any debate from abortion and rape to climate change and environmental protection. Above their pay grade.

Complexity is where it’s at. The economy can’t be explained or understood without math and psychology. Republicans can’t be explained or understood without psychology and a working knowledge of puppetry.

Everything that any of us has ever heard come out of the mouths of Republicans first came out of the mouths of the Koch Brothers then into a conservative think tank and then into a policy paper and then out of the mouths of babes, aka Republican rubes. The U.S. Republicans don’t understand what they’re saying and they aren’t smart enough to have come up with it themselves. They’re just not that smart.

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